A number of surveyed SMEs reported having a mere one to two weeks of manufacturing supplies left in reserve.
PETALING JAYA: Malaysia is on the brink of a severe industrial and economic bottleneck over the coming weeks.
Local enterprises are rapidly burning through their remaining stockpiles of raw materials as protracted disruptions to international supply chains show no signs of easing, a senior economist from the Prime Minister’s Office (PMO) has warned.
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PMO’s Senior Director of Economics and Finance Nurhisham Hussein cautioned that June and July are shaping up to be precarious months for the manufacturing sector and the wider business community.
Worsening global logistics gridlocks and energy shortages continue to stall the arrival of replacement inventory.
He stated that while many firms are currently staying afloat by drawing down previously amassed reserves, effectively concealing the true gravity of the crunch, the reality of the crisis will lay bare once these stockpiles are exhausted.
“A large number of businesses are keeping operations running by utilising older stock. However, by the middle of the year, these inventories will likely run dry just as the arrival of fresh supplies faces ongoing delays,” Nurhisham stated during an interview on a BFM podcast.
According to Nurhisham, the economic fallout is unraveling in successive, compounding phases that will progressively squeeze domestic manufacturing over the next few months.
The first phase involves fuel deficits and skyrocketing energy prices, which have already driven up overheads and logistical expenses for local businesses.
Phase two, he said, is a critical shortage of essential feedstock materials required by the petrochemical sector, threatening to trigger a domino effect across various manufacturing supply chains.
Internal discussions with industry players over the past few months indicate that most large-scale corporations held only enough raw material reserves to last for about two months, calculated from mid-March onwards.
“Past that window, companies are dependent on securing new shipments. Unfortunately, the current chaos in global supply networks is making replenishment incredibly difficult,” he said.
Nurhisham also highlighted data from a Federation of Malaysian Manufacturers (FMM) survey published in mid-April.
While multinational and large-scale corporations have managed to maintain a fragile stability, small and medium-sized enterprises (SMEs) are under immense operational duress.
A number of surveyed SMEs reported having a mere one to two weeks of manufacturing supplies left in reserve.
This leaves the small-business sector acutely exposed to unpredictable shipping timelines and escalating overheads.
The tangible impact of these raw material deficits is expected to manifest prominently this month. A growing number of production plants and factories may be left with no choice but to instigate temporary closures or suspend assembly lines.
Rather than a sudden, catastrophic collapse, Nurhisham described the downturn as a creeping paralysis that will chip away at industrial output, leading to reduced employee shifts, cutbacks on overtime, and a contraction in workers’ take-home pay, ultimately stifling national economic growth.
Addressing global energy markets, Nurhisham pointed out that stabilizing international oil supplies will be an arduous, long-term process, even if geopolitical conflicts in West Asia resolve immediately.
He emphasised that specialised energy infrastructure cannot simply be switched back on overnight; oilfields demand meticulous, highly regulated restoration protocols before they can safely return to peak output capacity.
“Even if active hostilities were to cease tomorrow, roughly 75% of West Asian oil production would remain offline and blocked from entering the global market for at least three months,” he said.
